2. The Deputy Secretary for Trade and Industry (DS/T&I) advised that the Administration intended to add a new clause 123A to provide for the protection of informers in criminal proceedings. The Assistant Commissioner of Customs and Excise (AC of CE) supplemented that the Administration had the responsibility to protect informers and many laws contained a similar provision.

Clause 124

3. Members were concerned about the lack of a statutory time limit for the return of articles seized for inspection by the Commissioner of Customs and Excise. AC of CE explained that in recognition of the need to give the copyright owner sufficient opportunity to inspect the seized article for the purpose of ascertaining whether it was an infringing copy, it was difficult to set a time limit for the return of the article. Seized articles would normally be returned within a few months. To address members concern, DS/T&I agreed to consider adding the words "within a reasonable period" to the clause for the purpose of completing inspection of articles detained by the Commissioner.

4. Members had reservations about the wording of subclause (4) which provided that the "Government is not liable to the person from whom the article was seized or detained for any loss or damage" incurred during the inspection. In response, AC of CE pointed out that enforcement officers were normally protected from claims for damages arising from the exercise of duty. He assured members that recognizing the delicacy of copyright works, enforcement officers always handled such products with care. The Administration might consider claims for damages on the merits of individual cases.

Clause 130

5. In reply to members questions, the Deputy Director of Intellectual Property (DD of IP) explained that clause 130 sought to specify the jurisdiction of district courts, in particular their power to issue orders for delivery up of infringing copies or other articles.

DIVISION VII - PROCEEDINGS RELATING TO IMPORTATION OF INFRINGING ARTICLES

Clauses 131 to 140

Clause 132

6. In reply to members questions, the Administration clarified that under the Agreement on Trade Related Aspects of Intellectual Property Rights (the TRIPS Agreement), border measures had to be provided for imported or trans-shipped copyright articles to facilitate copyright owners and exclusive licensees in taking civil proceedings against infringers by applying to the court for a detention order to detain suspected imports of pirated copyright products. However, there was no obligation to apply such measures to articles in transit, hence non-application of detention orders for such goods as specified in clause 132(4). Patented goods in transit were treated likewise in the Patents Bill. The Bills Committee on Patents Bill recommended that the issue should be left to the common law to decide on a case-by-case basis as to whether importation of patented goods had taken place.

7. Miss Margaret NG drew members attention to the definitions of "article in transit" in clause 193 of the Bill and clause 73(2) of the Patents Bill. Since the Administrations intention was to exempt goods in transit from infringement of patent rights as shown in clause 73(2) of the Patents Bill, she enquired whether deletion of the subclause would result in different treatment of articles in transit in the two bills. The Administration agreed to provide a paper to compare clause 132 of the Bill with clause 73 of the Patents Bill in relation to goods in transit and to explain the reasons for different treatment, if any.

Clause 133

8. In reply to members questions, DD of IP explained that there was no international norm as regards the issuance of detention orders. Having regard to the effect of detention orders on legitimate trade, the Administration considered it appropriate to designate the High Court to handle such applications. The provisions in the Bill concerning detention orders followed closely those in the Intellectual Property (World Trade Organisation Amendment) Ordinance (Ordinance No. 11 of 1996).

Clause 139

9. In reply to the Chairmans question, DS/T&I clarified that clause 139 related to the right of importer, consignee or owner of the seized or detained article to apply for compensation for any loss or damage suffered by him by reason of the seizure or detention from the applicant of a detention order, not from the Government.

DIVISION VIII - COPYRIGHT LICENSING

Clause 141

10. DS/T&I advised that the Administration intended to propose a Committee stage amendment (CSA) to subclause (4) to narrow the definition of licensing bodies. The amendment would have the effect that only large collecting societies which represented a certain percentage of the market of works would be defined as licensing bodies and regulated as such. Large collective copyright administration societies were singled out for regulation because of public concern about possible abuse of their monopolistic position. By bringing them under the jurisdiction of the Copyright Tribunal, a third-party dispute settlement mechanism to adjudicate on royalty charges would be available. As small societies could not monopolise the market, these were deliberately excluded from the regulatory regime to minimise government intervention in the administration of private rights.

11. The Administration further advised that existing collective copyright administration societies operated smoothly in Hong Kong but were keen for official recognition. To better monitor their operation, the Administration had proposed a voluntary registration system under which collective copyright administration societies might register by filing the necessary information essential for prospective copyright users, such as scales of royalty charges. To be eligible for registration, a licensing body had to fall within the definition in subclause 141(4) and meet the criteria set out in clause 145.

12. Some members were concerned that a narrow definition of licensing bodies might inadvertently give preferential treatment to large collecting societies as only such bodies could register for official recognition. To make the registration procedures more transparent, clear and specific criteria for registration should be laid down and an appeal mechanism established.

13. In response, the Director of Intellectual Property (D of IP) said that it was not the Administrations intention to register established societies only. In fact, it was looking forward to registering new collecting societies that might be established as a result of development of the Internet. He emphasised that registration had no bearing on the legitimacy of a licensing body.

14. Some members opined that if legitimacy was not an issue, licensing bodies might hesitate to register voluntarily as they would be subject to regulation. To achieve the purpose of regulation, a compulsory rather than a voluntary registration system should be considered.

15. In response, the Administration made the following points -

(a) A compulsory registration system was considered inappropriate because under the TRIPS Agreement, copyright owners should not be required to go through any type of formalities to assert their rights.

(b) The proposed voluntary registration system would be an effective regulatory mechanism for Hong Kong as existing collective copyright administration societies had indicated support for it. The Administration expected that most licensing bodies would come forward to register for official recognition given that unregistered societies would find themselves at a distinct disadvantage in the market. It should be noted that whether registered or not, collective copyright administration societies which fell within the definition of a licensing body would be subject to the jurisdiction of the Copyright Tribunal.

16. DD of IP supplemented that as the definition of licensing bodies would be narrowed to catch relatively large collective administration bodies, the Administration would prescribe a certain percentage of market share of copyright works represented by these bodies for such purpose.

17. Members agreed to further discuss the subject upon receiving the draft CSAs. At members request, the Administration agreed to provide a paper to explain the rationale for introducing a voluntary but not a compulsory copyright licensing scheme.

Clauses 142 to 149 - Registration of licensing bodies

Clause 144

18. In reply to the Chairmans question, D of IP advised that since less than ten licensing bodies were expected to come forward to register, a very simple paper registration system involving limited financial resources would serve the purpose. The fee payable for application for registration and renewal under clause 144 should be minimal.

Clause 148

19. Members noted that consequent to the CSA to subclause 141(4), the Administration would add a new subclause (c) to clause 148 to stipulate that the Secretary for Trade and Industry would prescribe a percentage of the market of works exceeding which a collecting society would be subject to the jurisdiction of the Copyright Tribunal.

Clauses 150 to 156 - References and applications with respect to licensing schemes

20. Members noted these clauses.

Clauses 157 to 162 - References and applications with respect to licensing by licensing bodies

Clause 160

21. Members noted the Administrations proposed CSA to subclause (1).

Clause 163 - Factors to be taken into account in certain classes of case

22. Members noted this clause.

Clause 164 - Implied indemnity in schemes or licenses

23. Members noted this clause.

DIVISION IX - THE COPYRIGHT TRIBUNAL

Clauses 165 to 168 - The Tribunal

24. In reply to members questions, the Administration provided the following information about the Copyright Tribunal -

(a) Upon commencement of the Intellectual Property (World Trade Organisation Amendments) Ordinance on 20 December 1996, the Performing Rights Tribunal which had three members was renamed the Copyright Tribunal. At present, the Chairman was a High Court Judge.

(b) The new Tribunal to be appointed after enactment of the Bill should consist of seven members including a Chairman and a Deputy Chairman. The members would be drawn from different sectors of the community to ensure a balance of interests.

(c) The Copyright Tribunal would determine disputes arising from licensing by the collective copyright administration societies under licensing schemes or in individual cases. Similar to other tribunals, the Copyright Tribunal would normally conduct hearings in public. There would be detailed rules governing its operation. Due to time constraints, the new Tribunal would continue to use the existing rules and the updated rules would be ready by August 1997. At members request, the Administration would provide the Bills Committee with a copy of the existing rules.

25. Noting that the jurisdiction of the Tribunal would be expanded to deal with different uses of copyright works, members considered it necessary to appoint members with suitable expertise to make informed judgements in the interests of the public. In response, the Administration emphasised that appointments would be made on the basis of the merits of the individuals concerned, taking into consideration their personal ability, expertise, experience, integrity, commitment to public service and their overall suitability for appointment. The objective was to ensure that the persons so appointed would render the best judgement and advice to the functioning of the Tribunal. At members request, the Administration agreed to provide a paper to explain the criteria for appointing members to the Copyright Tribunal.

Clauses 169 to 171 - Jurisdiction and procedure

26. Members noted these clauses.

Clause 172 - Appeals

27. A member was concerned about the availability of expertise in the High Court in dealing with copyright appeals. In response, DD of IP advised that where necessary, the court would call for expert advice.

DIVISION X - QUALIFICATION FOR COPYRIGHT PROTECTION

Clauses 173 to 177

Clause 176

28. Some members expressed concern about subclause (1) which stated that if "Hong Kong works ....... are not adequately protected in a country, territory or area as a result of any prejudicial treatment given to those works by that country, territory or area, the Governor in Council may by regulation" deny protection for copyright goods originating from such countries. They were particularly concerned about the expression "if it appears to" as this would involve subjective judgement.

29. In response, D of IP and DD of IP explained that Hong Kong proposed to adopt an open system under which any original copyright work created by any person anywhere in the world would qualify for protection in Hong Kong. There was a need to include a safeguard provision in the Bill to empower Hong Kong to take action to protect itself against any country which breached its international obligations and discriminated Hong Kong economically. Such a provision would be invoked under exceptional circumstances and with justifiable reasons. The Administration assured members that Hong Kong would not lightly deny copyright protection to people of other countries unless Hong Kong works were treated prejudicially.

Clause 177

30. In reply to members questions, D of IP and DD of IP clarified that first release meant the first fixation of the intangible property in a medium, be it sound recording or film.

DIVISION XI - MISCELLANEOUS AND GENERAL

Clauses 178 to 182 - Government and Legislative Council copyright

3. 31. Members noted these clauses.

Clauses 183 to 185 - Other miscellaneous provisions

4. 31. Members noted these clauses.

Clauses 186 and 187 - Transitional provisions and savings

5. Members noted these clauses.

Clauses 188 to 194 - Interpretation

Clause 193

Members noted the Administrations proposed CSA.

The next meeting of the Bills Committee would be held on 16 May 1997 at 12:30 pm.

The meeting ended at 10:40 am.

Provisional Legislative Council Secretariat
23 July 1997

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Bills Committee on Copyright Bill

Minutes of meeting held on Wednesday, 14 May 1997, at 8:30 am in the Chamber of the Legislative Council Building

Clause-by-clause examination of the Bill